Guide
Online business tax in Pakistan: what sellers pay in 2026–27
The three taxes a small online seller deals with in tax year 2026–27: income tax registration and the yearly return, the tax couriers and banks take off every sale, and sales tax. Each rate comes from an FBR document, with what changed in the Finance Act 2026 and why being on the Active Taxpayers List halves your courier deduction.
Every rate below is from an FBR circular, the Finance Act 2026 or FBR’s withholding rate card for tax year 2027, checked in October 2026, and linked where it appears. This is general information, not tax advice. Before you decide anything about your own return, confirm it with a tax practitioner or the FBR helpline on 051 111 772 772, the number on FBR’s website.
The three taxes at a glance
A small online seller in Pakistan deals with three separate things. They have different rules, and confusing them is where wrong advice starts.
| Tax | Who takes it | What you do |
|---|---|---|
| Income tax registration and return | FBR | Get an NTN, file a return every year |
| Withholding tax on your sales | Courier on COD, bank on online payments | Price it in, keep the statements, stay on the ATL |
| Sales tax | FBR for goods, the province for services | Register only if FBR’s list or your province says so |
Tax year 2027 in FBR’s language is July 2026 to June 2027, the year you are selling in now. The return you file in September or October 2026 is for tax year 2026.
Income tax: register and file
Registration is no longer optional for anyone selling online. FBR’s Income Tax Circular 01 of 2025–26 says every seller using an online marketplace or their own e-store “has been required under the law to get itself registered in income tax”, and that marketplaces and couriers “are also now barred to offer their services to any unregistered sellers”.
For an individual, registering means enrolling on FBR’s IRIS portal, and your CNIC number becomes your NTN. We cover the papers and the order of steps in how to register an online business, and the IRIS screens one by one in Urdu in NTN kaise banayein. This page does not repeat them.
Registration is half of it. The other half is the annual return:
- FBR’s due dates page gives September 30 for individuals. For tax year 2026, FBR’s Circular 3 of 2026–27 extended it to October 15, 2026.
- FBR publishes the Active Taxpayers List (ATL) on March 1, and its ATL page says a person is in it only if they filed the return for the tax year that list covers.
- A late return still gets you on the list, with a surcharge. The Finance Act 2026 raised it for individuals from Rs 1,000 to Rs 25,000 in section 182A, and waives it for an individual who gives the Commissioner an undertaking not to buy property for six months.
What couriers and banks deduct from your sales
The Finance Act 2025 added section 6A, which charges tax on every payment for goods ordered through an online marketplace or website, and section 153(2A), which makes the courier or the bank collect it before you are paid. FBR’s withholding rate card for tax year 2027, updated for the Finance Act 2026, lists these rates:
| How the buyer paid | On the ATL | Not on the ATL |
|---|---|---|
| Cash on delivery, deducted by the courier | 2% of the gross amount | 4% of the gross amount |
| Card, bank or wallet, deducted by the bank or gateway | 1% of the gross amount | 2% of the gross amount |
Who deducts it depends on how you sell, according to the circular:
- Your own store with cash on delivery: the courier, or the aggregator that delivers and collects for you.
- Your own store with online payment: the acquiring bank that settles the money to you.
- A marketplace with online payment: the marketplace’s bank, when it settles with you.
- A marketplace with cash on delivery: whoever delivers and collects, which can be the marketplace itself.
The tax is collected in each seller’s name, and couriers and banks file statements listing every seller’s transactions. Keep every payout statement your courier sends: it is your record of what was deducted. How the deduction shows on a payout, next to delivery and return charges, is in the COD payment cycle, and what it does to a returned parcel is in delivery charges for an online store.
Final tax or adjustable: what changed for 2026–27
A final tax settles the income tax on that income: it is not added to your other income on the return. An adjustable tax is an advance: it counts against the tax worked out on your actual profit.
- Tax year 2026 (July 2025 to June 2026). The income tax circular says the tax collected “is a final tax u/s 6A on the income derived by the seller from local e-commerce transactions”.
- Tax year 2027 onwards. The Finance Act 2026 added sub-section (3) to section 6A. Above Rs 200 million turnover in a tax year, the tax is adjustable. Up to Rs 200 million, you may opt out of the final tax regime when you file your return for tax year 2027 and onwards.
Whether opting out helps depends on your real profit. A seller on thin margins and a seller on fat ones get different answers, and the choice is made on the return. Take a year of courier statements and your purchase records to a tax practitioner before you file for tax year 2027.
Why ATL status costs money
The rate card doubles the e-commerce deduction for sellers not on the Active Taxpayers List. On cash on delivery, that is 4% of every delivered order instead of 2%. The same card lists 0.8% advance tax on cash withdrawals by a person not on the list, and FBR’s circular says it applies when the day’s withdrawals pass Rs 50,000. COD money lands in your bank, and if you withdraw it in cash to buy stock, that deduction comes too. List status also sets the advance tax your bank takes when you pay for ads abroad by card: 0.5% on the list and 1% off it, as our guide to running Facebook ads in Pakistan explains.
FBR’s benefits page also lists lower tax on bank profit, vehicles and property, and the right to claim back overpaid tax. To check your status, FBR’s ATL page says to SMS “ATL”, a space and your 13-digit CNIC to 9966.
Sales tax: federal and provincial
Sales tax on goods is federal and runs through FBR under the Sales Tax Act. Sales tax on services is collected by the provinces: PRA in Punjab, SRB in Sindh, KPRA in Khyber Pakhtunkhwa and BRA in Balochistan, with FBR covering services in Islamabad. A sales tax registration number (STRN) is separate from your NTN, and FBR’s sales tax basics say only people with active IRIS credentials can register, so the NTN comes first.
FBR’s list of persons to be registered names importers, wholesalers, dealers and distributors, manufacturers above the cottage industry limit (Rs 10 million annual turnover, or Rs 800,000 a year in utility bills), tier-1 retailers, service providers that a provincial or federal law requires to register, and anyone making zero-rated supplies. A seller who buys stock locally and sells at retail from home is not named in that list. One who imports stock, sells wholesale or manufactures above the limit is.
Online orders have their own sales tax rule. FBR’s Sales Tax Circular 02 of 2025–26 makes couriers and payment intermediaries withholding agents for sales tax on digitally ordered taxable goods. For cottage industry and retailers other than tier-1, the tax they collect is the full discharge of sales tax on those sales, with no input tax. Everyone else stays in the normal regime and adjusts the withheld tax in their sales tax return. The circular gives no withholding rate, and we did not find one on an FBR page, so ask your courier what it deducts and confirm it with a tax practitioner.
To see what a sales tax rate does to a price, the sales tax calculator adds or removes it, with each rate’s source listed.
A month of COD orders, worked out
Say you deliver 100 cash on delivery orders in a month at Rs 3,000 each, collected by the courier. That is Rs 300,000 gross.
- On the ATL: 2% is Rs 6,000 a month, Rs 72,000 over twelve such months.
- Not on the ATL: 4% is Rs 12,000 a month, Rs 144,000 over twelve such months.
The difference, Rs 72,000 a year at this size, is what being on the ATL saves on the courier deduction alone, before cash withdrawals. Put 2% into your costs per order next to delivery, packing and returns in the COD profit calculator.
Your tax year 2026–27, in order
- Now: if you have not filed for tax year 2026, the extended date is October 15, 2026.
- Every courier payout: save the statement, and check the deduction is 2% of the gross, not 4%.
- Through the year: keep purchase bills and expenses. You need them if you opt out of the final regime.
- March 1, 2027: FBR publishes the new ATL. Check your name by SMS to 9966.
- Before filing for tax year 2027: decide with a tax practitioner whether to stay in the final regime.
- If you import, sell wholesale or manufacture: ask about sales tax registration before you scale.
The rate card is updated after each Finance Act. FBR keeps current and past cards on its withholding tax rates page, so check it every July.
Questions sellers ask
Does an online business need to pay tax in Pakistan?
Yes. Since the Finance Act 2025, section 6A of the Income Tax Ordinance taxes every payment for goods ordered through an online marketplace or website. The courier or bank takes the tax off before it pays you. FBR’s Income Tax Circular 01 of 2025–26 also says every online seller has to register for income tax, and couriers and marketplaces may not serve unregistered sellers.
How much tax does an online seller pay in Pakistan?
On cash on delivery the courier deducts 2% of the gross amount, and on online payments the bank or payment gateway deducts 1%, if you are on the Active Taxpayers List. FBR’s withholding rate card for tax year 2027 doubles both for sellers not on the list: 4% on COD and 2% online. Sales tax is separate and depends on what you sell and whether you must register.
Is the 2% courier deduction a final tax?
For tax year 2026 (July 2025 to June 2026), FBR’s circular calls it a final tax on income from local e-commerce. The Finance Act 2026 makes it adjustable for turnover above Rs 200 million, and lets sellers with turnover up to Rs 200 million opt out of the final regime when they file the return for tax year 2027 onwards. Ask a tax practitioner which suits your margins.
Do I still need to file a tax return if the courier already deducts tax?
To be on the Active Taxpayers List, yes. FBR includes a person in the list only for the tax year they filed a return for. Without it, the courier deduction on COD is 4% instead of 2%, and banks deduct 0.8% when your cash withdrawals pass Rs 50,000 in a day.
Do I need sales tax registration to sell online?
Only if you fall in FBR’s list: importers, wholesalers, dealers and distributors, manufacturers above the cottage industry limit, tier-1 retailers, and a few others. A seller who buys stock locally and sells online at retail from home is not named in that list. Sales tax on services is provincial, so a service business checks with its province’s revenue authority.
What is the last date to file the income tax return for tax year 2026?
FBR’s due date for individuals is September 30. For tax year 2026, FBR’s Circular 3 of 2026–27, dated September 30, 2026, extended it to October 15, 2026.
This page is general information, not tax advice. Confirm your own position with a tax practitioner or the FBR helpline.
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